How to Price Candles for Wholesale

Wholesale price is usually your full cost per candle times 2, and the shop then sells at about twice what it paid. CandleScience says retailers usually buy wholesale items for 50 percent of the retail price, and that you can double or triple your cost to reach a wholesale price. The word "full" matters: if your cost leaves out labor and overhead, doubling it can leave you with no profit.

What are the steps?

1. Get your full cost per candle. Materials, packaging, labor and overhead (see our cost per candle guide).
2. Multiply by 2 for the minimum wholesale price. Craftybase calls 2 times cost the standard multiplier, and says it is a minimum because shops need room to mark up.
3. Decide if you need more room. CandleScience suggests 2.5 or 3 times cost to leave space for discounts, so your price still holds after a deal.
4. Set the retail price at twice wholesale. That is the price you suggest to the shop (the "keystone" idea). CandleScience says the shop's retail price is at least twice the wholesale price.
5. Compare with your direct price. If you sell on your own site or at fairs, do not charge less than the shop's retail price, or shops will stop ordering.
6. Write minimums and terms on your line sheet. CandleScience lists opening order minimum, reorder minimum, payment terms, lead times, shipping and returns.

Worked example

Say your full cost per candle is $6.20 (an example). Here are two choices:

At 2 times cost your margin is exactly 50 percent. If you then give a shop a 10 percent discount on $12.40, the price drops to $11.16, and the margin to (11.16 - 6.20) / 11.16, about 44 percent. At 2.5 times cost, the same 10 percent discount gives $13.95 and a margin of (13.95 - 6.20) / 13.95, about 56 percent. That is why a little extra room helps.

You might round $12.40 up to $12.50, and $24.80 up to $25. Rounding to clean numbers is fine as long as your margin stays where you want it.

Minimums work the same way. A $300 opening order at $12.50 a candle is 300 / 12.50 = 24 candles, or two cases of 12.

Does my retail price have to match the shop's?

It should not be lower. If a shop buys a candle at $12.50 and sells it at $25, but your site sells the same candle at $19, the shop is undercut. Set your own direct price at the suggested retail or higher.

Common mistakes

• Doubling a cost that leaves out labor or packaging.
• Pricing at exactly 2 times cost and then giving away discounts.
• Selling direct for less than shops charge.
• Not knowing your margin after shipping to a shop. Add what you spend on packing and postage into your own numbers.
• Skipping minimums, so you ship three candles and lose money on the postage.
• Not rechecking prices when supplies go up.

Questions

Is wholesale always 50 percent of retail?

It is the common rule. CandleScience says retailers usually buy at 50 percent of retail. Some shops, rep groups or marketplaces work differently, so check their terms before you agree.

What should my minimum order be?

CandleScience does not give one number. It says to set an opening minimum and a reorder minimum on your line sheet, and points out that packing one $300 wholesale order takes less time than packing the same value in single retail orders. Work backward from your own shipping and packing cost, then pick a number that makes small orders worth filling.

What margin is a good one?

CandleScience says 25 to 50 percent is a reasonable range for a new candle business. Craftybase suggests aiming for 40 to 50 percent of the selling price, as margin, not markup on cost. Check which one a number refers to before comparing.